Metrics, ROI and TCO are great, but focus on what matters: A lesson learned from Southwest

We live in a metrics-obsessed world. We find meaning in numbers. How many of you check the stock market valuations once a day? How many of you have a dashboard somewhere that shows you the stock market tickers throughout the day? How many of you work in organizations that have set organizational benchmarks that consist of numbers?

You’re not alone. As humans, we yearn to find meaning in everything we do, so we assign value to our own activities and the activities in which we participate. Those quarterly goals are just one instantiation of this fact, but there are certainly countless others that one could point to as evidence of this need.

There is one special metric that gets a lot of attention: Return on Investment (ROI). In many, many places, ROI analyses are performed on all aspects of the business to ensure that the activity being undertaken provides a positive return for the bottom line. ROI analyses are most often done using hard numbers; “If we spend X dollars on this activity, we expect a return of X * 2 dollars over a two year period.” That return may consist of a combination of new sales or reduced expenses, but it’s generally a hard figure.

As IT departments have been forced to be more strategic and focus on activities that are business-facing, more and more CIOs are looking at both existing and new activities and attempting to quantify exactly how much an activity will cost and, if it has expense implications, it may not be done.

But, sometimes, ROI as function of hard dollars simply doesn’t matter. I saw an absolutely perfect example of bottom-line focused ROI being thrown out the window today in favor of simply doing the right thing. Although the example I’m about to impact was not an IT project, I think it carries lessons for all of us from CEOs to CIOs to everyone in the organization. Further, it shows that going above and beyond the call of duty can be incredibly impressive and turn a negative situation into something extremely positive.

I spent part of this week at an event in Houston, Texas and flew home today. I boarded my Southwest flight right on time, chose my seat and, along with 130 other people, awaited our departure from Houston and our ultimate arrival in St. Louis. Shortly after the door closed, we were told that the crew was having trouble with the plane’s PA system. Long story short, it took more than one and a half hours for the maintenance people to correct the issue, so the plan took off very late.

The crew apologized profusely and it was evident that they were just as frustrated as the rest of us.

Of the 130 or so people on the plane, most were destined for either St. Louis or Louisville, which was the plane’s route, so they would get home. However, 21 people had different connecting flights in St. Louis. These 21 people were destined for Detroit, Columbus and Charlotte. By the time our plane departed Houston, it was clear that these 21 people were not going to make it to their connecting flights and, for all 21 people, the connecting flights were the final flights of the evening to their destinations. The crew informed the passengers that those that had connecting flights would be put up in a hotel and put on the first flights out the next day.

Had this been the end of the story, I don’t think anyone would have been surprised. After all, this is pretty much how the airline industry works, right?

But, there was a twist.

We landed in St. Louis. No, that’s not the twist! 130 late people and 21 frustrated people landed. That’s actually a good thing as opposed to the alternative!

As we were taxiing to the terminal, one of the flight attendants got on the PA system and announced that we had arrived in St. Louis. Next, he said, “For the 21 of you that were supposed to go to Detroit, Columbus or Charlotte tonight and missed your connecting flight, when you deplane, please proceed to gate 21. We’ve wrangled together a plane and a crew and we’re taking all of you to your destinations tonight.”

What happened next? The passengers on the plane—including the people destined for St. Louis—cheered and more than a few people yelled out, “Southwest rocks!” To a person, everyone on that plane, although we were very late, walked off that plane feeling like a million dollars.

I stopped and chatted for a minute with one of the gate agents when I left the plane and asked him how they did it. He said, “When we heard what was happening, we just got on the phone and started making calls. We’ve been on the phone for the past hour and a half trying to put this together so we could take everyone home tonight.” He wasn’t able to talk for very long because he was busy helping passengers with their questions.

Sure, it’s possible that some manager somewhere crunched some numbers and realized that it would be a nightmare to try to get everyone on their AM flights and would cost the company a ton of money. It’s possible that some manager somewhere decided that putting 21 people up in a hotel would be too expensive.

Or, with an eye toward Southwest’s brand that includes being an airline that tries to focus on their customers, someone could have simply said, “Yep… we’re going to lose money on this flight. 21 passengers will never cover the costs for the crew and fuel for three stops, but we’re going to do the right thing.”

Hard ROI? Nah. This is going to be expensive. But, just imagine how happy those 21 people are and imagine how impressed the rest of the passengers were when the announcement was made. A big company actually scrambled to take care of their customers and threw out the rulebook and their efforts to do so. Frankly, I can’t even fathom seeing such behavior from other airlines.

Again, I’m assuming that the company had altruistic motives here and I want to live in this little dream world for the illustrative benefits it has for my thoughts here. Southwest tonight found a way to turn a big negative situation into something that will result in a lot of word of mouth and return customers. From that perspective, the ROI in this venture is probably pretty high! But, it also demonstrates that, sometimes, crunching the numbers just doesn’t make sense. If you have the reasonable potential to fix a situation and can do so in a way that doesn’t bankrupt the company, just do it, if it’s the right thing to do. A brand is not made or broken on ROI figures. It’s made or broken on the actions of the people responsible working for the organization.